STRUCTURING THE PAYMENT MECHANISM

2.4.6  Appropriate consideration should be given to the payment mechanism at an early stage in the development of a PPP project. The payment parameters should be realistic and fair to support the long-term partnership. The public agency should also seek feedback from the private sector when developing the payment mechanism.

2.4.7  Before developing the payment mechanism, the public agency should ensure that:

a)  Service delivery can be objectively measured;

b)  Both quantity and quality of service can be measured; and

c)  Availability and performance standards are measurable, recordable and realistic.

2.4.8  The payment mechanism should also be objective, transparent and easy to operate.